TaxTMI 
TaxTMI 
2019 (9) TMI 468
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....70,15,694/- as per recall Notice dated 15th March, 2018. The Financial Creditor claimed that there was debt which was in default and thus, the Application in format. 2. The matter came up before Adjudicating Authority (National Company Law Tribunal, Mumbai Bench) and the Section 7 Application was admitted on 2nd July, 2019. The present Appeal has been filed by the shareholders of the Corporate Debtor. According to the Appellants, the Corporate Debtor had availed financial assistance/cash credit facility and term loan from UCO Bank which was sanctioned on 19th January, 2005, 22nd February, 2008, 31st March, 2009, 6th November, 2009 and 18th May, 2012 of a total amount of Rs. 29,96,00,000/-. Necessary documents were executed. Later, the Appellants claim that the Corporate Debtor entered into Master Restructuring Agreement (MRA - in short) dated 31st March, 2012 with the Assignor on 22nd June, 2012. Mortgage of properties was created under the Master Restructuring Agreement and other ancillary documents. It is claimed that the account of the Corporate Debtor was classified as non-performing asset (NPA) on 31st March, 2013 and the bank had moved the Debt Recovery Tribunal. The As....
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....ed by the Financial Creditor. It is argued that there is 5 years' delay and the limitation will not get extended because proceeding was filed in DRT. It is argued that Section 14 of Limitation Act, 1963 saves period of limitation in the event of new proceedings being filed when the Court in which the former proceeding was being proceeded suffered from defect of jurisdiction or defect of like nature. Argument is that law does not contemplate two proceedings on same cause of action and as such, the proceeding before DRT will not save period of limitation under IBC. The Appellants also argued that existence of documents of mortgage would not affect limitation as the provisions relating to mortgaged property are with regard to Suit and the present proceeding is an Application under IBC. It is also argued that the Corporate Debtor is a Micro Small and Medium Enterprises (MSME - in short) (UAM No.MH18C0141075) and made efforts to compromise with the Financial Creditor but the Financial Creditor did not give positive response. 5. Against this, for Respondent No.1 - Financial Creditor, it is argued that as on 02.07.2019, there was Rs. 93,93,16,689/- outstanding against the Corporate Deb....
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....versus ICICI Bank & Anr." reported in (2018) 1 Supreme Court Cases 407, the Hon'ble Supreme Court observed:- "27. The scheme of the Code is to ensure that when a default takes place, in the sense that a debt becomes due and is not paid, the insolvency resolution process begins. Default is defined in Section 3(12) in very wide terms as meaning non-payment of a debt once it becomes due and payable, which includes non-payment of even part thereof or an instalment amount. For the meaning of "debt", we have to go to Section 3(11), which in turn tells us that a debt means a liability of obligation in respect of a "claim" and for the meaning of "claim", we have to go back to Section 3(6) which defines "claim" to mean a right to payment even if it is disputed. The Code gets triggered the moment default is of rupees one lakh or more (Section 4). The corporate insolvency resolution process may be triggered by the corporate debtor itself or a financial creditor or operational creditor. A distinction is made by the Code between debts owed to financial creditors and operational creditors. A financial creditor has been defined under Section 5(7) as a person to whom a financial deb....
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....uthority. Under subsection (7), the adjudicating authority shall then communicate the order passed to the financial creditor and corporate debtor within 7 days of admission or rejection of such application, as the case may be." 29. The scheme of Section 7 stands in contrast with the scheme under Section 8 where an operational creditor is, on the occurrence of a default, to first deliver a demand notice of the unpaid debt to the operational debtor in the manner provided in Section 8(1) of the Code. Under Section 8(2), the corporate debtor can, within a period of 10 days of receipt of the demand notice or copy of the invoice mentioned in subsection (1), bring to the notice of the operational creditor the existence of a dispute or the record of the pendency of a suit or arbitration proceedings, which is pre-existing - i.e. before such notice or invoice was received by the corporate debtor. The moment there is existence of such a dispute, the operational creditor gets out of the clutches of the Code." It is clear that the question of limitation has to be looked into from the angle whether the debt is payable in law or in fact. Although the proceeding under IBC is an Applica....